Summary of Consolidated Financial Results for the First Quarter of the Fiscal YearEnding January 31, 2025 [Japanese GAAP]
June 7, 2024
Name of listed company:
Code:
9692
Representative: (Title)
Contact:(Title)Computer Engineering & Consulting Ltd.
URL: https://www.cec-ltd.co.jp/en/
Representative Director & President
General Manager, Accounting & Finance Division

Scheduled Quarterly Report submission date:
Scheduled date of dividend payments:
Supplementary materials prepared for quarterly financial results:
Briefing held on quarterly financial results:
1.

Listed exchange: Tokyo(Name) Takashi Himeno(Name) Yoshiyuki Nakamura
Tel. +81-(0)46-252-4111

June 10, 2024
–
Yes
No

(Rounded down to the nearest million yen)
Consolidated financial results for the first quarter of the fiscal year ending January 31, 2025 (February 1, 2024
through April 30, 2024)(1) Consolidated operating results (Cumulative)
Net sales(Percentages indicate year-on-year changes.)

Operating income

Ordinary income

Net income attributableto owners of parent%
Million yen%

Million yen%

Million yen%

Million yen

14,049

6.3

1,919

4.2

1,924

3.9

1,311

2.0

13,22212.0

1,842 104.6

1,853

104.2

1,286

53.6

1Q of FY ending
Jan. 2025
1Q of FY ended
Jan. 2024(Note) Comprehensive income:1Q of FY ending January 2025
1Q of FY ended January 2024

1,601 million yen 22.9%
1,302 million yen 59.1%

Quarterly net income
per share
Yen

Diluted quarterly net
income per share
Yen

39.02

38.98

38.33

38.24

Total assets
Million yen

Net assets
Million yen

52,60851,391

1Q of FY ending
Jan. 2025
1Q of FY ended
Jan. 2024(2) Consolidated financial position

1Q of FY ending
Jan. 2025
FY ended Jan.
2024

Equity ratio%

Net assets per share
Yen

41,38978.6

1,230.17

40,78779.3

1,212.54(Reference) Total shareholders’ equity: 1Q of FY ending January 2025
1Q of FY ended January 2024
2.

41,353 million yen
40,760 million yen

Dividends

FY ended Jan. 2024
FY ending Jan. 2025
FY ending Jan. 2025
(Forecast)

Q1 endYen––

Q2 endYen
25.00

Annual dividends
Q3 end
Yen
–

25.00

–

(Note) Revision to most recently announced dividend forecast: No- 1-

Year end
Yen
30.00
30.00

Total
Yen
55.00
55.00

3.

Forecasts of consolidated financial results for the fiscal year ending January 31, 2025
(February 1, 2024 through January 31, 2025)(Percentages indicate year-on-year changes.)
Net sales

H1
Full year

Million yen%

27,70056,500

4.7
6.4

Operating income

Ordinary income

Net income
attributable toowners of parent

Million yen

Million yen

Million yen%

3,160 (10.4)
6,280 (1.3)%

3,175 (10.5)
6,300 (1.7)

Net income
per share%Yen

2,170 (11.5)
4,300 (5.3)

64.55
127.91(Note) Revision to most recently announced dividend forecast: No*Notes(1) Significant changes in subsidiaries during the current quarterly consolidated cumulative period (transfer of specificsubsidiaries accompanying changes in scope of consolidation): None
(2) Application of accounting policies specific to the preparation of quarterly consolidated financial statements: No(3) Changes in accounting policies or estimates, restatements:(i) Changes in accounting policies accompanying revisions of accounting standards, etc.:(ii) Changes other than those under (i) above:(iii) Changes in accounting estimates:(iv) Restatements:

None
None
None
None

(4) Number of shares issued and outstanding (common stock)(i) Number of shares issued and outstanding(including treasury stock)

1Q of FY ending Jan.
2025

37,600,000
FY ended Jan. 2024
shares37,600,000
shares(ii) Ended number of shares of treasury stock

1Q of FY ending Jan.
2025

3,983,910
FY ended Jan. 2024
shares3,983,862
shares(iii) Average number of shares during period(quarterly cumulative total)

1Q of FY ending Jan.
2025

33,616,100 1Q of FY ended Jan.
shares 2024

33,569,798
shares* The Quarterly Summary of Financial Results is not subject to quarterly reviews by a certified public accountant or audit
firm.
* Notes on forward-looking statements and other notes(Forward-looking statements)
Forward-looking statements, including the forecasts of financial results contained herein, are based on information
currently available to the Company and certain assumptions the Company deems reasonable. Actual results andperformance may differ significantly from forecasts for various reasons. Please see page 5 (Notes on Forecasts ofConsolidated Financial Results and Other Forward-Looking Information) of the accompanying materials for theconditions on which assumptions underlying the forecasts are based, important points concerning the use of forecasts,
and other related information.
(How to obtain quarterly supplementary briefing materials)
The Company plans to publish quarterly supplementary briefing materials on the Company website (https://www.cecltd.co.jp) on Friday, June 7, 2024.

- 2-

Contents of accompanying materials
1.

Qualitative Information on Financial Results for the Quarter Under Review .................................................................................. 4(1)

Overview of Business Results....................................................................................................................................................... 4(2)

Explanation of Financial Position ................................................................................................................................................. 5(3)

Notes on Forecasts of Consolidated Financial Results and Other Forward-Looking Information ................................................ 5

2.

Quarterly Consolidated Financial Statements and Major Notes ...................................................................................................... 6(1)

Quarterly Consolidated Balance Sheet .......................................................................................................................................... 6(2)

Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income ....................... 8
Quarterly Consolidated Statement of Income
First Quarter Consolidated Cumulative Period ....................................................................................................................... 8
Quarterly Consolidated Statement of Comprehensive Income
First Quarter Consolidated Cumulative Period ....................................................................................................................... 9(3)

Notes on the Quarterly Consolidated Financial Statements ........................................................................................................ 10(Notes on the Going Concern Assumption) ................................................................................................................................ 10(Notes in the Event of Significant Changes in the Amount of Shareholders' Equity) ................................................................. 10(Changes in Accounting Policies) ............................................................................................................................................... 10(Segment Information, etc.) ........................................................................................................................................................ 10

3.

Other .............................................................................................................................................................................................. 11
Orders received and outstanding balances of orders received ..................................................................................................... 11- 3-

1. Qualitative Information on Financial Results for the Quarter Under Review(1)Overview of Business Results
Due to the effects of government policies to support the economy, Japan’s economy experienced a gentle recovery during thefirst-quarter consolidated cumulative period under review (February 1, 2024 through April 30, 2024), with improving
employment and income conditions. Nevertheless, the future outlook continues to pose the risk that an economic downturn
overseas will exert downward pressure on the domestic economy. Examples include concerns about the impact of financial
tightening across the globe and prospects for the Chinese economy. Other notable factors include inflation, geopolitical risks,and fluctuations in financial and capital markets.
In the information services industry, along with the continuing recovery in the domestic economy, the appetite for investments
in digital transformation (DX) to improve corporate productivity and competitive strengths remains high. Demand for
digitalization, including system upgrades and migration to the cloud as part of business structural reforms, is expected tocontinue to grow. In particular, use of ChatGPT and other generative AI solutions is spreading rapidly, with the ongoingproliferation of AI-based business efficiency improvements and workstyle reforms. In addition, demand for cybersecurity
solutions continues to show rapid growth in response to increasingly sophisticated cyberattacks.
Under these circumstances, as it entered the final year of its medium-term management plan for the three-year period from thefiscal year ended January 2023 through the fiscal year ending January 2025, the CEC Group engaged in business inaccordance with three basic policies: (i) strengthening business capabilities; (ii) strengthening human resources and technicalcapabilities; and (iii) strengthening the management foundations. This plan seeks to realize a sustainable society and sustained
growth. During the first-quarter consolidated cumulative period under review, we consolidated our sales divisions and sought
to deepen cross-selling and up-selling across the Company to key customers and to engage with potential new customers. In
addition, we strengthened joint efforts with partner companies; provided support in sales and marketing; and launched apartner program intended to resolve social issues through co-creation. And as a way of contributing to society through ourbusiness activities, we began offering a free parenting support app that allows for easy printing of paper toys such as pictures
for coloring and paper crafts.
The business results for the cumulative first-quarter consolidated period under review showed positive results due to overall
firmness in ICT investments, and progress proceeded as planned in both core businesses*1 and focus business areas*2, driving
net sales up 826 million yen (6.3%) from the same period the previous year to 14,049 million yen. In terms of profit, despite
higher expenses due to growth investments, higher sales led to growth of 77 million yen (4.2%) in operating income to 1,919
million yen; growth of 71 million yen (3.9%) in ordinary income to 1,924 million yen; and growth of 25 million yen (2.0%) inquarterly net income attributable to owners of the parent to 1,311 million yen.
*1 Core businesses:

The Company defines its core business as those that function as stable foundations supporting theCompany's operations, including contracted development, which serves as the basis of Company
sales; provision and operation of ICT infrastructure, development of onboard devices, embedded
development, and the testing business.

*2 Focus business areas:

The Company’s six focus business areas are (1) production and logistics solutions, (2) mobility
services, (3) services provided in cooperation with Microsoft Japan, (4) migration services, (5)security services, and (6) DX cloud platforms.

Business results in the individual segments are reviewed below.
(Digital Industry Business)
In the core businesses, services in both central and Western Japan benefited from firmness in systems development, backed by
active ICT investment among manufacturing customers. The focus business area of mobility services demonstrated positive
trends in areas such as Big Data analysis and cloud development in the MaaS domain. In production and logistics solutions,while results related to smart factory solutions remained poor due to restrained investment, maintaining the trend observed theprevious fiscal year, logistics solutions recorded solid performance. As a result, net sales grew 171 million yen (3.7%) fromthe same period the previous year to 4,814 million yen. Operating income rose 73 million yen (6.3%) over the same period to
1,245 million yen due to higher net sales.
(Service Integration Business)
The core businesses of ICT infrastructure development, operations/maintenance, and systems development trended firmly.
Services provided in cooperation with Microsoft Japan, one of the Company's focus businesses, also maintained favorable
performance thanks to growth in business negotiations related to Dynamics 365 and Power Platform. Migration services also
saw strong performance thanks to growth in demand for cloud migration and security enhancements, against a backdrop of DX
promotion. Security services continued to show favorable performance in terms of both surveillance services and sales of ourown security products. As a result, net sales grew 654 million yen (7.6%) from the same period the previous year to 9,235
million yen. Operating income rose 153 million yen (9.2%) over the same period to 1,821 million yen due to higher net sales.

- 4-

(2)

Explanation of Financial Position(Total assets)
Total assets as of the end of the period stood at 52,608 million yen, up 1,217 million yen from the end of the previous
consolidated fiscal year. This was due mainly to an increase of 1,546 million yen in cash and deposits.
(Liabilities)
Total liabilities amounted to 11,219 million yen, up 615 million yen from the end of the previous consolidated fiscal year. Thiswas due mainly to an increase of 595 million yen in the allowance for bonuses.
(Net assets)
Net assets grew 602 million yen from the end of the previous consolidated fiscal year to 41,389 million yen. This was mainly
due to increases of 303 million yen in retained earnings and 155 million yen in valuation difference on available-for-salesecurities.

(3)

Notes on Forecasts of Consolidated Financial Results and Other Forward-Looking Information
There are no changes in forecasts of consolidated financial results for the fiscal year ending January 31, 2025 or for thesecond-quarter cumulative period of the same fiscal year announced on March 8, 2024. We will promptly disclose revised
forecasts should it become necessary in light of future circumstances and business trends.
* Forecasts of business results reflect judgments based on information currently available. They do not guarantee that theCompany will achieve the forecast results. Actual results may vary from forecast figures due to changing businessconditions and other factors.

- 5-

2. Quarterly Consolidated Financial Statements and Major Notes(1)

Quarterly Consolidated Balance Sheet(Unit: thousands of yen)Previous Consolidated Fiscal
Year(January 31, 2024)

Current First Quarter
Consolidated Accounting
Period(April 30, 2024)

Cash and deposits

26,714,532

28,260,707

Notes and accounts receivable - trade, and contract assets

AssetsCurrent assets
10,343,099

9,401,818

Product

319,019

125,381Work in progress

531,948581,774

Other accounts receivable

30,346

10,601

1,075,983

1,219,959(9,394)(9,038)39,005,535

39,591,204

Buildings and structures, net

4,561,882

4,577,126

Land

2,004,644

2,004,644

871,959

845,884

7,438,487

7,427,655

Others239,307376,589

Total intangible assets

239,307376,589

4,719,660

5,225,147

OthersAllowance for doubtful accounts
Total current assets
Non-current assets
Property, plant, and equipment

Other, net
Total property, plant, and equipment
Intangible assets

Investments and other assets
OthersAllowance for doubtful accounts(11,909)(11,909)

Total investments and other assets

4,707,750

5,213,237

12,385,544

13,017,481

51,391,080

52,608,685

Total non-current assets
Total assets- 6-

(Unit: thousands of yen)Previous Consolidated Fiscal
Year(January 31, 2024)

Current First Quarter
Consolidated Accounting
Period(April 30, 2024)

Accounts payable - trade

2,211,551

2,217,244

Short-term loans payable

350,000

350,000

Current portion of long-term loans payable

13,80013,800

Income taxes payable

795,357

873,546

Allowance for bonuses

716,224

1,311,811–

11,412

Liabilities
Current liabilities

Allowance for performance-linked remuneration
Allowance for share-based remuneration

–

3,333

2,835

2,517

Others

4,916,547

4,860,069

Total current liabilities

9,006,316

9,643,735

Long-term accounts payable

22,12022,120

Provision for directors’ retirement benefits

15,05016,080Net defined benefit liability

111,131

113,148

Asset retirement obligations

1,396,138

1,396,839

53,11827,231

1,597,558

1,575,418

10,603,874

11,219,153

Capital stock

6,586,000

6,586,000

Capital surplus

6,737,9786,737,978

Retained earnings

30,135,872

30,439,084

Treasury shares(3,462,774)(3,462,860)

Total shareholder equity

39,997,076

40,300,202

455,482

610,554

Provision for loss on orders received

Non-current liabilities

OthersTotal non-current liabilities
Total liabilities
Net assets
Shareholder equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

12,611

17,172Remeasurements of defined benefit plans

295,633

425,672

Total accumulated other comprehensive income

763,727

1,053,399

26,40135,92940,787,205

41,389,532

51,391,080

52,608,685

Subscription rights to shares
Total net assets
Total liabilities and net assets

- 7-

(2)

Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income(Quarterly Consolidated Statement of Income)(First Quarter Consolidated Cumulative Period)(Unit: thousands of yen)Previous First Quarter
Consolidated Cumulative
Period(February 1, 2023 April 30, 2023)

Current First Quarter
Consolidated Cumulative
Period(February 1, 2024 April 30, 2024)

Net sales

13,222,568

14,049,299

Cost of sales

9,688,259

10,228,875

Gross profit

3,534,309

3,820,424

Selling, general, and administrative expenses

1,691,968

1,900,502

Operating income

1,842,340

1,919,921

109

463

Non-operating income
Interest income
Foreign exchange gains

142–

Dividends from insurance

7,953

7,175

Others

3,491

3,185

Total non-operating income

11,696

10,824475

524

Loss on retirement of non-current assets–

427

Foreign exchange loss

–

4,797

Non-operating expenses
Interest expenses

Others98

154

Total non-operating expenses

573

5,903

1,853,463

1,924,841

Loss on retirement of non-current assets

454–

Total extraordinary loss

454–

Ordinary income
Extraordinary income

Quarterly net income before income taxes

1,853,009

1,924,841

Income taxes - current

664,403779,842

Income taxes - deferred(97,959)(166,696)

Total income taxes

566,444

613,145

Quarterly net income

1,286,565

1,311,695

Quarterly net income attributable to owners of parent

1,286,565

1,311,695- 8-

(Quarterly Consolidated Statement of Comprehensive Income)(First Quarter Consolidated Cumulative Period)(Unit: thousands of yen)

Quarterly net income

Previous First Quarter
Consolidated Cumulative
Period(February 1, 2023 April 30, 2023)

Current First Quarter
Consolidated Cumulative
Period(February 1, 2024 April 30, 2024)

1,286,565

1,311,695(21,167)

155,072

Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

2,465

4,561

Remeasurements of defined benefit plans

34,784130,039

Total other comprehensive income

16,083289,672

1,302,649

1,601,368

1,302,649

1,601,368

Quarterly comprehensive income(Comprehensive income attributable to)
Quarterly comprehensive income attributable to owners ofparent- 9-(3)Notes on the Quarterly Consolidated Financial Statements(Notes on the Going Concern Assumption)
Not applicable(Notes in the Event of Significant Changes in the Amount of Shareholders' Equity)
Not applicable(Changes in Accounting Policies)
Not applicable(Segment Information, etc.)[Segment information]
Previous First Quarter Consolidated Cumulative Period (February 1, 2023 - April 30, 2023)
1. Information on net sales and income/loss by reporting segment(Unit: thousands of yen)
Reporting segment

Adjustment(Note) 1

Total (Note) 2

Digital Industry
Business

Service Integration
Business

4,642,497

8,580,071

13,222,568–

13,222,568

85

177,012

177,097(177,097)

–

Total

4,642,582

8,757,083

13,399,666(177,097)

13,222,568

Segment profit

1,171,947

1,668,336

2,840,283(997,943)

1,842,340

Total

Net sales
Sales to externalcustomers
Inter-segment sales ortransfers(Notes) 1. The adjustment of (negative) 997,943 thousand yen to segment profit consists mainly of Companywide expenses notallocated to individual reporting segments. Companywide expenses consist mainly of administrative-section expenses
not allocated to individual reporting segments.
2. Segment profits are adjusted against operating income reported on the Quarterly Consolidated Statement of Income.
Current First Quarter Consolidated Cumulative Period (February 1, 2024 - April 30, 2024)
1. Information on net sales and income/loss by reporting segment(Unit: thousands of yen)

Reporting segment

Adjustment(Note) 1

Total (Note) 2

Digital Industry
Business

Service Integration
Business

4,814,281

9,235,017

14,049,299–

14,049,299

85

151,718

151,804(151,804)

–

Total

4,814,367

9,386,736

14,201,103(151,804)

14,049,299

Segment profit

1,245,872

1,821,849

3,067,721(1,147,800)

1,919,921

Total

Net sales
Sales to externalcustomers
Inter-segment sales ortransfers(Notes) 1. The adjustment of (negative) 1,147,800 thousand yen to segment profit consists mainly of Companywide expenses notallocated to individual reporting segments. Companywide expenses consist mainly of administrative-section expenses
not allocated to individual reporting segments.
2. Segment profits are adjusted against operating income reported on the Quarterly Consolidated Statement of Income.

- 10-

3. Other
Orders received and outstanding balances of orders received
Orders received and the outstanding balance of orders received in the Digital Industry Business exhibited positive trends in thefirst-quarter consolidated cumulative period under review. Appetite for ICT investment was strong, although this varied from
customer to customer. Orders received and the outstanding balance of orders received in the Service Integration Businessremained at the same levels as in the previous year, as while special demand for our own products faded, the number ofcompanies pursuing DX increased.
Orders received during the first-quarter consolidated cumulative period are broken down below by business segment.
Orders received(thousands of yen)

YoY change (%)

Balance of orders
received(thousands of yen)

YoY change (%)

Digital Industry Business

5,332,011

110.3

3,935,193

111.4

Service Integration Business

10,853,846

104.5

13,956,037

98.8

16,185,858

106.3

17,891,231

101.3

Segment

Total- 11-